Building an Online Empire: The 13 Most Popular Online Business Models
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addition, you should be angling for your ecommerce business to form a true brand. The brand should be something that customers can be loyal to and feel they have some stake in. Having a brand identity will help you in the long run to remain ahead of competitors that enter your space. Having an identity also makes it easier to accumulate profit when you launch new products.
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Think about your brand identity from day one, and frame your content around that identity as you promote your store.
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While branding is important, it is almost equally important to be continually growing your business in new ways that spurs revenue while also increasing your market share in the space. One of the best ways for an ecommerce business to do this is by selling through multiple channels. Your online store is just one channel. The more channels you have, the more exposure you get to the entirety of the niche. One very simple way to go about this is to convert some of your better products into an Amazon FBA business on top of the ecommerce website. At the end of the day, the more you can do to make ...more
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Investor Ivan An investor looking to make a big splash in the online scene might find investing in an ecommerce store to be a golden goose. Since they control the majority of the operations (i.e. no affiliate program that might ban you and hold your funds), they are able to do things with an ecommerce business that they just can’t do with other business models.
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Even drop shipping and Amazon FBA does not give you full control of the business like a fully-sourced ecommerce business. Buying or designing new products or ordering inventory takes capital, so it likely makes sense to bring an investor into an ecommerce business. After all, an ecommerce store can blow up to become a powerful brand, which other leading industry businesses can come to respect.
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We mentioned it already in the seller section, but multichannel selling can be a huge boost to your revenues. Here are just a few different online sales channels you can tap into: Amazon FBA Overstock.com Buy.com Shopping.com Shopzilla.com Froogle Shopping comparison sites Other public marketplaces (even places like eBay)
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Software-as-a-Service (SaaS) is an incredibly attractive business model. It is yet another model that literally could not exist without the internet. The premise is that a piece of software is hosted on a cloud infrastructure (i.e., operated through a web browser), and businesses pay a monthly fee to get access to this software.
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SaaS businesses in general are probably the most complex business models in our explainer series. It often takes a good amount of coding knowledge, combined with a good amount of user interface design skills, to really make a SaaS product worthwhile.
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The main difference between SaaS businesses and software companies is that SaaS is hosted in the cloud. Basically, this gets rid of the need for an end user license to activate the software and any infrastructure to host the software. Instead, the SaaS company hosts their membership...
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The 3 Periods of a SaaS Business For every SaaS business, there are three main phases that they are going to experience. Most people understand the Startup phase, and then everyone dreams about the Stable Golden Goose phase when the money is just rolling in. One of the phases that is often not talked about, though it is one of the major stress periods for a SaaS business when they either make it or break it, is known as Hypergrowth. Let’s dive into the three phases: Startup – this includes getting everything going, programming a working product, and “going to market” with it to acquire your ...more
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SaaS businesses can be a range of software that covers many different things. However, SaaS businesses are most helpful to other businesses by allowing them to run more efficiently.
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Once you DO have a product off the ground, and have a handful of customers proving the model’s value, you are likely going have to reinvest all of your profits — plus some more capital — to scale the business.
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It is better to buy a stable business (almost always) rather than one that is still going through a massive growth cycle. A stable business will allow you to more effectively tweak your marketing funnels and optimize the business.
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The #1 thing a SaaS business seller can do is find ways to increase their LTV as much as possible. The higher the LTV number, the more attractive the business is going to look, since a SaaS business is all recurring income. This can be a huge deal maker if the LTV is high enough or is showing a trajectory increase.
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It goes without saying that the best traffic that converts the highest is usually going to be organic search traffic from places like Google and Bing.
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A new marketing channel could be as simple as taking your best organic ranking, or most popular content, and converting that content into a Youtube video. It is, after all, the 2nd largest search engine in the world, so it is worthwhile to be found there.
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When building an MVP it’s important to hire coders that aren’t perfectionists. Perfectionists will slow down the process of launching an MVP - you shouldn’t worry to much about the design, bugs or scalability of the code. Just get it done and rush it out. Depending on the complexity of the software (an MVP should never be that complex), it should take no longer than a few months to develop. There are literally thousands of stories circulating on the internet about failed software projects because they took too long to build. Don’t become one of them.
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It’s often said the best product doesn’t always become the most popular.
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The LTV of a customer is very useful because this tells you how much money you can spend to acquire a new customer.
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Perhaps the most important metric of them all is the monthly churn percent, which measures the number of customers that cancel a subscription each month. Average churn rates vary across different industries, but getting to below 5% churn would be a good goal. Churn is important because it decides on your need to replace lost customers. If you start the year with 100 customers, at the end of the year with a 20% churn rate you’ll be left with just 7 customers at the end of the year. Compare that to a 5% churn, you’ll still have 54 customers. The power of churn should not be underestimated, often ...more
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An info product is usually a long, detailed explanation of how something works, delivered in a consumable method to a hungry audience in need of information. While info products started off as PDFs in the early days of the digital info product business, nowadays many are high-end videos and recorded webinars.
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Such videos tend to offer more value to customers than just reading through a PDF, and many info product creators now prefer to offer courses in this recorded webinar style.. Since video is an awesome tool for building relationships online, many product owners exclusively do videos, in the hope that their customers learn to like and trust them, as usually the product creator will have more than one product to offer their customers.
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This is an info product business based around a community. Instead of just taking a course in the traditional sense, members pay a recurring monthly subscription to have access to a forum filled with advanced Amazon FBA business owners, who can then mastermind with each other by sharing advice, tips, and strategies.
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ClickBank.com While ClickBank is not an info product business model, you can sign up for free as an affiliate and browse their products. Clickbank houses hundreds of info products in many different niches which can give you ideas and inspiration for your own info product if you want to create one yourself.
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One of the best ways to find popular info products is to simply check out the gravity. Gravity is a metric Clickbank uses to show how many different affiliates have sold the product in a certain rolling time period. The higher the gravity, the more popular the product. Any product with a gravity of over a 100 is going to be an extremely popular product (and perhaps very competitive to promote, since there are so many affiliates promoting it).
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There are a lot of benefits to an info product based business. Perhaps the most noticeable is that unlike other models such as Amazon FBA or Amazon affiliate, an info product business model has much larger profit margins. After all, there are no actual costs to delivering an info product, other than sales taxes (depending where you are) and merchant processing fees. The cost to manufacture an info product is either nothing (if you create it yourself) or a one-time spend on design and production. Because of this, the net profits from an info product can be substantial, even with only a handful ...more
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At the end of the day, the reason people buy an info course is not because you are delivering unique information. It is because you deliver a unique perspective on that information. Many people are willing to pay premiums to learn an authority’s perspective on different subjects, and this is the main strength that info products really sell on: expertise.
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Since people are buying info products for the expertise, it makes much more sense to buy a brand that is separated from a personality or a guru.
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seller of an info product business should have solid proof of earnings and traffic. In addition to earnings, you will want to point out the average refund rate that you have with your products, since this is something a buyer is going to want to know.
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However, you can always add new traffic channels as experiments. For example, if the business makes most of its money via Facebook ads, try sponsored tweets on Twitter or Google Adwords.
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When apps first came out, it was a gold rush of innovations and cheap apps that continued to rake in money. Today’s environment is very different from that time, but there is still a ton of money to be made. After all, by 2017, the app business is predicted to be a $77 billion dollar industry.
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Despite all the changes going on, there are still three main monetization strategies for apps. Paid downloads Free downloads, app is monetized by in-app ads (similar to how Adsense might appear on a website) Free downloads, app is monetized by in-app purchases (most prominently shown with mobile gaming pay-to-win style games) These can be mixed and matched. Some apps might be paid apps, for instance, that still have in-app upgrade purchasing opportunities.
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Gmail While not strictly an app, as many people access it via web browsers on their computers or tablets, it is a great example of how an app can complement an already existing product. The app is more intuitive for those using it on their smartphone versus a browser version, plus it allows Gmail to harness more data from their user to offer even better performance in the future for the consumer.
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An app product is similar to a mini-Software-as-a-Service (SaaS) product in that there is a membership aspect and potential for a large community. Just a single app can be wildly lucrative if it is for the right market at the right time. Apps have sold for hundreds, sometimes millions, of dollars after they were created.
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While these huge sales are unusual, they show the potential of what apps can do. Many apps create revenue month after month, for years. These could be compared to niche sites, as there is very little work that needs to be done outside of updating the apps for each new version of the iPhone or Android OS.
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addition to potential profits and the owner’s ability to remain somewhat passive once the app is live, an app has the simple advantage of being on mobile devices. You have consumers right where they spend the vast majority of their time. You can use that space for all kinds of marketing advantage. For example, many apps will run Facebook ads targeted at mo...
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One thing that has changed dramatically in the years since apps came on the scene is how competitive the market has become. In January of 2016 alone, there were 19,130 gaming apps introduced to the iTunes store. That is pretty heavy competition. Which means if you are going to succeed with an app business model, you need to make sure you have a quality product — combined with a quality marketing plan — to get the app off the ground and running. Developing an App Additionally, the development costs can be very high for apps. With the level of quality you need to be successful, you will need to ...more
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The biggest mistake a buyer can make when purchasing an app is buying it right after its launch. Launch numbers are usually highly inflated because of the large marketing push that goes into putting it up on the market place. Because of that user engagement, downloads, and other metrics are not going to be accurate. Instead, it is better to prepare for the long haul and make sure the app has staying power by purchasing after the numbers have leveled off.
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Some of the best numbers to check out are the placement of the app n the actual app store for the targeted keywords, and especially how many downloads the app is getting.
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Downloads are a moderately good metric to measure an apps success, but don’t be fooled, as the most important metric is user engagement. If you have millions of downloads but zer...
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Again, the key to a good app is evidence of very strong user engagement.
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Typically, though, user engagement has a fairly steady downward trajectory. The average app retains just 25% of its users after 90 days of app install. As more apps are created, there’s more noise in the marketplace, and you are going to have to make sure the app stands out from the competition.
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The first step to monetizing an app is building an incredible product – one that’s immediately useful, delights the user and generates buzz.
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Deeply understand your user’s needs and build an app experience that continually brings a meaningful difference to their lives. Stand out from your competition so using your app is the no-brainer. Without a winning in-app experience, don’t even think about monetization; your income stream will be far from significant and be short lived.
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For a subscriber’s first year, the App Store and Google Play take 30% commission on the sale. The second year their commission is reduced to 15%. Invest in your product to retain your users beyond the 1st year and consider creating a web-app purchase funnel to avoid these large fees.
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Build an app that’s immediately useful. Stays relevant over time. Consistently 1+ your competition. Deliver a personalized user experience. Never stop testing and iterating pricing and marketing strategies.
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Examples WP Curve WP Curve is a perfect example of a productized service. Instead of finding a bunch of small paying clients that need WordPress design, WP Curve has made it their sole purpose to give every one of their customers unlimited access to anything WordPress related: design, development, plugin integration, and more.
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These kind of businesses are very good diversification for a portfolio builder. While they are not nearly as hands off as an Adsense or Amazon affiliate business, they offer a unique set of benefits to a portfolio builder. For one, they aren’t reliant on any program. You will never have to worry about Adsense or Amazon banning your account, because it is a product you own from start to finish. It also allows you to split test the entire sales funnel, unlike an Amazon FBA business where you are again adherent to Amazon’s policies.
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Huge Amount of Built-in Organic Traffic Considering that 38% of initial product searches begin with Amazon now, beating out Google’s 35%, Amazon’s organic traffic is hugely valuable. Everyone agrees that Amazon has a monstrous amount of traffic going to it every day, from organic traffic to direct traffic and more.
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